8 Questions to Ask Before Joining a Network Marketing Company

Remember those Tupperware and Pampered Chef parties your mom used to host? Well, those were part of something called network marketing, also known as multi-level marketing (MLM). It’s been around for a while, and it involves people using their personal networks to grow a business or sell a product.

Even though MLM companies have faced criticism and been compared to pyramid schemes, they actually offer real products or services. Plus, they provide opportunities for entrepreneurs to build their own businesses.

Before you think about joining one of these MLM companies, it’s important to ask yourself some key questions. In this article, we’ll go over six questions you should consider before becoming a part of an MLM organization.

1. How long has the company been around?

The age of a multi-level marketing (MLM) company is important. Older companies usually have a good reputation and a stable support system.

If a company has been around for a while, they likely have experienced network marketers who can vouch for them. Ask for references and check their track record.

But remember, the age of the company is just one factor. Consider their overall performance, growth, and customer satisfaction before deciding.

2. Does the company offer any products of genuine value?

Before joining an MLM, make sure you genuinely like what the company sells. It’s easier to promote something you believe in.

Watch out for sketchy companies that focus on selling the opportunity itself – that’s a bad sign! Pyramid schemes are illegal and often get shut down. Also, be cautious if they require an expensive Starter Kit. Ask about the percentage of revenue from actual customer sales versus purchases by distributors.

Research the company’s products or services and see if they match your values. You’ll be representing them to your network, so it’s important to be passionate about what you’re selling.

3. Is the product or product line unique with a strong demand?

Can you easily find similar products anywhere, or is it exclusive? Check how well the products sell. It’s crucial to be associated with a company whose products are consistently in high demand, not just a passing trend. This is vital for retaining customers and getting referrals.

Take Tupperware, for example; its non-consumable nature raises the question of how many plastic bowls one person truly needs. Consider if the company provides essential items alongside unique ones.

These essential products could potentially replace purchases from major retailers like Amazon, Target, or Walmart, fostering long-term customer loyalty and generating steady income for your business.

Learn more: How to Sell MLM Products

4. How is the pay structured?

Before committing to an MLM company, it’s important to understand how they handle pay. Check out the compensation plan, specifically how they distribute commissions on sales and bonuses for recruiting new members.

Find out if profits are based on retail sales, wholesale (after deducting retail commissions), or a company-selected amount based on product profitability. A fair pay structure should reward both sales performance and team building.

Don’t rely solely on promotional materials; ask questions to understand when you’ll receive your profits. You can also seek advice from someone with network marketing experience.

Learn more: 3 Types of MLM Compensation Plans

5. Does the company have a good reputation?

When thinking about joining a business, it’s crucial to focus on integrity. Look into the MLM company’s reputation, ethical standards, and adherence to legal rules. Check if there are any legal issues or controversies linked to the company.

Who runs the company? Do they have a track record of success in business? Have they succeeded in previous ventures, showing they understand how to thrive? Do they have experience in network marketing success, or is there someone experienced guiding them?

Check for reviews and testimonials from current and past distributors for insights into their experiences. A company dedicated to ethics and transparency is a solid foundation for your business.

Learn more: 8 MLM Schemes To Avoid

6. How saturated is the market?

It’s not ideal to join a company that everyone already knows about. If lots of people you know are already working with that company, chances are the competition will be tough. Your potential customers and business partners may have already chosen someone else. Building a successful business in a saturated market is possible, but it’ll be challenging unless you already have a large network.

Look at the competition and demand for the company’s products or services. Choosing a company with momentum and growth in the market can lead to better chances of success and financial rewards.

7. What support or training is offered by the company?

A reputable MLM company usually provides comprehensive training and support to help their distributors build a successful network marketing business. Before joining any MLM opportunities, check out their training programs, mentorship options, and available resources.

You should make sure the company offers a proven marketing and sales system with tools like video and audio training, sales presentations, printed materials, catalogs, and a robust website.

Consider the product warranty too. Will customers turn to you if there’s an issue, or does the company back both the product and you?

8. What marketing strategies are taught, used, and expected?

Before joining an MLM company, spend some time looking into their teachings. Are they helping you to build a personal brand that opens doors for you, or are they pushing you to simply promote a product or product line like a walking advertisement?

Think about whether their marketing approach might compromise your own brand or limit your future opportunities. For instance, if hosting home parties isn’t your thing, joining a company that heavily relies on this approach might not be the best fit.

Also, it’s important to assess your sponsor or upline—this is the person mentoring you. Are they a genuine leader in the industry, capable of teaching and guiding others effectively? Do they know what they’re doing, and can they pass on that knowledge to you?

Bottom Line

To sum it up, avoid getting swept away by the buzz surrounding the “next big thing” in companies. Take the time to research and inquire based on your aspirations and what you envision for your life in 5, 10, or 15 years. This way, you’ll discover a company that resonates with you and offers an extra income source, aligning with your broader goals.

Asking these key questions enables you to make a thoughtful choice about whether a particular MLM company suits you.

Always remember, success in network marketing demands commitment, effort, and authentic connections with customers and team members. When paired with the right company, products, and support, your life as a network marketer can be fulfilling.

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